Bumper profits boost for Dixons Carphone
ELECTRICALS and mobile phones giant Dixons Carphone is expected to unveil surging profits when it publishes its annual results this week.
The television-to-tablets retailer looks set to record an 18 per cent rise in its annual pre-tax profits to £450million in Wednesday’s report, after snapping up a greater share of the mobile phone market.
The City is also expecting to hear an update on its push into the United States after it announced plans in July last year to launch up to 500 stores under a tie-up between its Connected World Services (CWS) arm and Sprint, America’s third-largest mobile phone group.
Analyst Graham Spooner, of The Share Centre, said: “Investors will be keen to see if there have been any signs more recently that consumers have become cautious with spending due to the referendum.
“News on trading in Europe and any progress with the new Sprint joint venture in the US will also be of interest.”
The firm shrugged off fears of a high street slowdown last month after it posted a strong set of results for the fourth quarter and raised its profit guidance for the year.
It pencilled in annual profits to hit between £445million and £450million during its update in May and confirmed that UK like-for-like sales had risen to 4 per cent in the fourth quarter and 6 per cent over the full year. Year-end net debt was expected to be below £300million.
The company said it had seen market share gains across electricals and mobile phones in the UK & Ireland, Nordic countries and Greece.
At the time, Dixons Carphone chief executive Sebastian James said it showed that “consumers were ready to spend”.
In an upbeat announcement, he said: “Our view is that consumers are ready to spend but have – rightly – become more canny, and so need to be tempted with great deals and exciting new products.
“We see this as encouraging; after all, launching new technology well, creating fun events and coming up with great deals for customers in both the digital and physical worlds is our stock-in-trade.
“We continue to make good progress in building out our new CWS and Knowhow businesses.
“We are, if anything, even more excited about the potential for these comparatively new areas of our group, and have had some real and tangible wins, as well as a strong pipeline and plans for the coming months and years.”
Citi Research analyst Assad Malic said: “The core business should continue to benefit from broader market share gains.
“In addition, we see convergence of consumer electronics and mobile connectivity, along with the ‘Internet of Things’, as supportive of longerterm growth expectations.”
The retailer was born out of a £5billion mega-merger between Dixons and Carphone Warehouse in 2014. It employs more than 42,000 people in 11 countries.
‘It should benefit from market share gains’